Would you give as much under reduced charitable deductions?
Despite the fact that charitable deductions are the 10th-most popular tax break (nearly 40 million Americans claim them annually), those in Washington are willing to gamble that you're going to give as generously in the future without it. But is their roll of the dice with your wages a good one?
Here are four reasons that reducing charitable tax deductions in any form would be bad business for America:
1) Reducing charitable deductions would be the wrong solution at the wrong time (bad economy) to fix our country's budgetary problems.
Reducing, capping or eliminating charitable deductions would yield a minuscule amount of revenue compared with the massive increases in the debt, deficits and future expenditures brought on by the Obama administration -- with Obamacare, for example. Even according to the White House, reducing charitable deductions would add only $239 billion between 2013 and 2017 to the federal income.
As Seth Giertz, the University of Nebraska economics professor who co-wrote the Congressional Budget Office's May 2011 analysis of options for the charitable giving deduction, told ABC News, "given the fiscal problems we're looking at, you can't just scale back the charitable deduction. Problems are just too big for that."
2) Reducing charitable deductions would trickle down, tying the hands of the wealthy, crippling charities and hurting the middle class and the poor, who often are managing nonprofits or the benefactors of them.
As Stephen L. Carter, professor of law at Yale University and the author of "The Violence of Peace: America's Wars in the Age of Obama," wrote, "maybe in a perfect world nobody would worry about whether gifts to a particular organization were tax-deductible. In the imperfect world in which we live, however, charities fight to preserve their 501(c)(3) status, and with good reason: The deductibility of contributions affects people's willingness to give."